FTC settles with supplement maker in first case against fake, paid reviews on Amazon

midian182

TechSpot Editor
Staff member

Amazon has spent years battling against the scourge of fake reviews. Back in 2015, the company launched legal action against 1114 people for allegedly engaging in the practice, but this is the first time the FTC has stepped in.

The agency writes that Cure Encapsulations paid a firm called AmazonVerifiedReviews.com to create and post the fake reviews, helping maintain a 4.3 out of 5 average for the garcinia cambogia weight-loss supplement, which can cause acute liver failure. The FTC also alleges that the defendant made false and unsubstantiated claims, including reviews that stated the product was a “powerful appetite suppressant” and “literally blocks fat from forming.”

“People rely on reviews when they’re shopping online,” said the FTC’s director of consumer protection, Andrew Smith. “When a company buys fake reviews to inflate its Amazon ratings, it hurts both shoppers and companies that play by the rules.”

As part of the settlement, Cure Encapsulations is no longer allowed to make weight-loss, appetite-suppression, fat-blocking, or disease-treatment claims for any of its products without “competent and reliable scientific evidence,” which includes human clinical testing. Additionally, it is prohibited from “making misrepresentations regarding endorsements.”

The company has also been hit with a $12.8 million fine, but that will be suspended once it pays $50,000 and completes its tax obligations. The remainder will be payable if the FTC finds Cure Encapsulations misrepresented its financial situation.

Amazon has welcomed the FTC’s decision. “Amazon invests significant resources to protect the integrity of reviews in our store because we know customers value the insights and experiences shared by fellow shoppers," a spokesperson said, in a statement. "Even one inauthentic review is one too many. We have clear participation guidelines for both reviewers and selling partners and we suspend, ban, and take legal action on those who violate our policies."

Image credit: monticello via Shutterstock

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rrwards

TS Booster
This is good to see, but I think overall trying to combat this is fighting a losing battle. I have no idea how you fix it though.
 

Uncle Al

TS Evangelist
It's really a more simple process than is being stated. The verification of buyer is a good start but not a solution. The problem is that in order to validate a "qualified" reviewer would require a detailed bio of each reviewer to include employer and other detailed information that would violate a persons legal rights. Multiple purchasers could be another standard but having an employee "buy" 5-10 products would be easily arranged. About the best thing possible is to not list reviews until 500+ reviews are listed, but that would deprive smaller products of a review and cater only to those with lots of sales & reviews.

The bottom line is simple. BUYER BEWARE
 

p51d007

TS Evangelist
First thing I look for on reviews is the number of 1 & 2 star reviews... Not the 4 & 5 star reviews.
 

Wendig0

TechSpot Paladin
Amazon's allowing 3rd parties to sell under their name will eventually be the downfall of Amazon. Unless Amazon does away with the marketplace business model, they're going to fail. Right now, Amazon is so inundated with cheap Chinese knockoff junk that it's becoming increasingly difficult to find quality products.
 

mbalensiefer

TS Enthusiast
Amazon's allowing 3rd parties to sell under their name will eventually be the downfall of Amazon. Unless Amazon does away with the marketplace business model, they're going to fail. Right now, Amazon is so inundated with cheap Chinese knockoff junk that it's becoming increasingly difficult to find quality products.
The marketplace business model? That is exactly the reason they are successful.
 
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Wendig0

TechSpot Paladin
The marketplace business model? That is exactly the reason they are successful.
The reason they are successful is their outstanding customer service, not for allowing 3rd parties to sell their junk on their website. Amazon is quickly turning into an online flea market of Chinese crap.
 
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captaincranky

TechSpot Addict
The reason they are successful is their outstanding customer service, not for allowing 3rd parties to sell their junk on their website. Amazon is quickly turning into an online flea market of Chinese crap.
You tell 'em. The place to buy genuine American made goods is Ebay :poop::facepalm:....:rolleyes:
 
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